Originally launched in accordance with provisions of the Medicare Modernization Act of 2003, Recovery Audit Contractors (RACs) are having an increasingly significant impact throughout the U.S. healthcare industry, including the O&P profession, amidst a political climate of intense scrutiny on identifying payment errors, waste, and fraud in federal programs through legislation such as the Improper Payments Elimination and Recover Improvement Act of 2012. (Author’s note: RACs are now known as Recovery Auditors (RAs); however, this article refers to them as RACs since it is the more familiar term.)Although other entities focus on fraud detection, RACs focus primarily on identifying improper Medicare payments resulting from billing and coding errors and on educating providers in correct claims submission processes. A demonstration program conducted from 2005-2008 resulted in more than $900 million in overpayments being returned to the Medicare Trust Fund and nearly $38 million in underpayments returned to healthcare providers. The program was then launched and has continued to grow in collections.
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